If Intel (NASDAQ:INTC) wants to play any significant part in the mobile computing revolution that's going on all around us today, the chip giant had better get serious about the Atom line of mobile processors. This week's Atom update is a small step in the right direction, but is it enough?

The mobile computing space is divided into two major growth markets at the moment: smartphones and netbooks. Intel's Atom products are popular in netbooks, while ARM Holdings (NASDAQ:ARMH) and a plethora of ARM licensees like Texas Instruments (NYSE:TXN), Samsung, and Qualcomm (NASDAQ:QCOM) completely dominate the smartphone market. Even if you include handheld media players like the Apple (NASDAQ:AAPL) iPod or Microsoft (NASDAQ:MSFT) Zune in the market description, I still couldn't name a single product with Intel Inside.

The ARM architecture is moving into the netbook space, but the Atom isn't likely to return fire anytime soon. ARM's main advantage is in low power consumption, which is critical when the product is used to power small devices where a large, heavy battery would be downright ugly.

The new Atoms push power draws down to the 7-watt range, or about one-tenth the electric juice a Core 2 desktop chip would eat. Like I said, that's not a bad result. However, some ARM-based chips draw less than 0.5 W under full load and measure their idle power draw in tens of milliwatts.

So I suppose Intel is happy to battle for supremacy in the netbook space when it comes to mobile computing. The latest, skinniest processors Intel can produce still don't look anywhere near svelte enough to run a decent phone. And Advanced Micro Devices (NYSE:AMD) has enough on its hands fighting Intel in the desktop, laptop, and server markets from the eternal underdog position. Don't expect AMD to power your next phone. ARM has an absolute stranglehold on the burgeoning smartphone sector.

Do you think Intel will ever become a true competitor in the smartphone market? Short of buying ARM, I doubt it -- but the comments box below is dying to hear what you think.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. Apple is a Motley Fool Stock Advisor pick. Intel and Microsoft are Motley Fool Inside Value recommendations. Motley Fool Options has recommended calls on Intel and a diagonal call strategy on Microsoft. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.